Which of the Following Statements Is Correct

question 109

Multiple Choice

Which of the following statements is correct?

• A)The use of debt in the capital structure results in tax benefits to the firm.
• B)Debt is referred to as "financial leverage" because it magnifies returns to shareholders.
• C)Debt management ratios evaluate whether a firm is financing its assets with a reasonable amount of debt versus equity financing.
• D)All of these statements are correct.

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Definitions:

Superimposing

The process of laying or placing one thing over another, typically so that both are still evident.

Patterning

The recurring or organized arrangement of elements in a particular sequence or design.

Construct

Bipolar quality or continuum used to classify people.